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Participants in the first round of talks conducted in March 1990 to negotiate the treaty

On 2 August 1945, the Potsdam Agreement, promulgated at the end of the Potsdam Conference, among other things agreed on the initial terms under which the Allies of World War II would govern Germany. A provisional German–Polish border known as the Oder–Neisse line awarded, in theory within the context of that "provisional border", most of Germany's eastern provinces to Poland and the Soviet Union. Those agreements reached were provisional and the agreement stipulated that the situation would be finalised by "a peace settlement for Germany to be accepted by the Government of Germany when a government adequate for the purpose is established" (Potsdam Agreement 1.3.1). Parts of those above-mentioned agreements were burdened with controversy from several sources e.g., Churchill's comment about "stuffing the Polish goose too full" (of German lands). The overall "German Question" became one of the salient and crucial issues of the long-running Cold War, and until it ended in the late 1980s, little progress had been made in the establishment of a single government of Germany adequate for the purpose of agreeing to a final settlement. This meant that in some respects (largely, but not only, technical), Germany did not have full national sovereignty.[4]:42–43

The signatures of the representatives of the four powers on the final treaty

The Treaty on the Final Settlement with Respect to Germany was signed in Moscow, Soviet Union, on 12 September 1990,[4]:363 and paved the way for German reunification on 3 October 1990.[6] Under the terms of the treaty, the Four Powers renounced all rights they formerly held in Germany, including those regarding the city of Berlin.[4] Upon deposit of the last instrument of ratification, united Germany became fully sovereign on 15 March 1991.

The treaty allows Germany to make and belong to alliances, without any foreign influence in its politics. All Soviet forces were to leave Germany by the end of 1994. Before the Soviets withdrew, Germany would only deploy territorial defense units not integrated into the alliance structures. German forces in the rest of Germany were assigned to areas where Soviet troops were stationed. After the Soviets withdrew, the Germans could freely deploy troops in those areas, with the exception of nuclear weapons. For the duration of the Soviet presence, Allied troops would remain stationed in Berlin upon Germany's request.[4]

Germany undertook to reduce its armed forces to no more than 370,000 personnel, no more than 345,000 of whom were to be in the Army and the Air Force. These limits would commence at the time that the Treaty on Conventional Armed Forces in Europe would enter into force, and the treaty also took note that it was expected that the other participants in the negotiations would "render their contribution to enhancing security and stability in Europe, including measures to limit personnel strengths".[7] Germany also reaffirmed its renunciation of the manufacture, possession of, and control over nuclear, biological, and chemical weapons, and in particular, that the Nuclear Non-Proliferation Treaty would continue to apply in full to the unified Germany (the Federal Republic of Germany). No foreign armed forces, nuclear weapons, or the carriers for nuclear weapons would be stationed or deployed in six states (the area of Berlin and the former East Germany), making them a permanent Nuclear-Weapon-Free Zone. The German Army could deploy conventional weapons systems with nonconventional capabilities, provided that they were equipped and designed for a purely conventional role. Germany also agreed to use military force only in accordance with the United Nations Charter.[4]

Another of the treaty's important provisions was Germany's confirmation of the by now internationally recognised border with Poland, and other territorial changes in Germany that had taken place since 1945, preventing any future claims to lost territory east of the Oder-Neisse line (see also Former eastern territories of Germany) which had historically been part of Germany for centuries before 31 December 1937. The treaty defined the territory of a 'united Germany' as being the territory of East Germany, West Germany and Berlin, prohibiting Germany from making any future territorial claims. Germany also agreed to sign a separate treaty with Poland reaffirming the present common border, binding under international law, effectively relinquishing these territories to Poland. This was done on 14 November 1990 with the signing of the German-Polish Border Treaty.[4] Furthermore, the Federal Republic was required by the treaty to amend its Basic Law so as to be constitutionally prohibited from accepting any application for incorporation into Germany from territories outside the territories of East Germany, West Germany and Berlin.

Although the treaty was signed by West and East Germany as separate sovereign states, it was subsequently ratified by united Germany (the Federal Republic of Germany).

After the Soviet Union dissolved itself in December 1991, the command unit of the Soviet Group of Soviet Forces in Germany devolved to the Russian Federation. The German government subsequently recognized the Russian Federation's claim to be the continuator state of the Soviet Union, including the right to maintain troops in Germany until the end of 1994. However, with post-Soviet Russia facing severe economic hardship, President Boris Yeltsin ordered Russian troop deployment in Germany to be reduced to levels significantly below those permitted in the Treaty. The last Russian troops left Germany at the end of August in 1994, four months before the treaty deadline.

In the first decade of the 21st century, the Bundeswehr underwent a gradual transformation to a fully professional force. By 2011, the year Germany voluntarily suspended conscription, the Bundeswehr had retained fewer than 250,000 active duty personnel – barely two thirds of the country's treaty limit of 370,000.

The treaty has been alleged to have been violated on a number of occasions. Manoeuvres including NATO troops in Trollenhagen, Mecklenburg-Vorpommern in the area of the former East Germany have been questioned.[8][verification needed] Under one interpretation of the treaty, only German forces may be deployed in the area of the former East Germany.[dubious – discuss] In September 2007, France offered Germany joint control over its nuclear arsenal, but the Germans rejected this.[9]

Historian Stephen F. Cohen asserted in 2005 that a commitment was given that NATO would never expand further east,[10] but according to Robert Zoellick, then a US State Department official involved in the Two Plus Four negotiating process, this appears to be a misperception; no formal commitment of the sort was made.[11] On 7 May 2008 the former Soviet leader Mikhail Gorbachev, in an interview with the British newspaper The Daily Telegraph, stated his view that such a commitment had been made:

The Americans promised that NATO wouldn't move beyond the boundaries of Germany after the Cold War but now half of central and eastern Europe are members, so what happened to their promises? It shows they cannot be trusted.[12]

However, in a 2014 interview Gorbachev reversed himself by saying that the topic of "NATO expansion" as such was "not discussed at all", although he maintained that the decision to expand NATO into the east was a "violation of the spirit of the statements and assurances made to us in 1990".[13]

Some argue that such a commitment was not made during the discussions on German reunification.[14] Allegedly, the issue of expanding NATO into Central and Eastern European states was not on the agenda at that time, since all of them were Warsaw Pact members and most still had substantial Soviet military forces stationed on their soil,[15][16] and Gorbachev "did not even contemplate seeking a provision that would bar any other Warsaw Pact countries from eventually pursuing membership in NATO".[14] This was rebuked by the National Security Archive in December 2017, which had looked in the declassified record:[17]

The documents show that multiple national leaders were considering and rejecting Central and Eastern European membership in NATO as of early 1990 and through 1991, that discussions of NATO in the context of German unification negotiations in 1990 were not at all narrowly limited to the status of East German territory, and that subsequent Soviet and Russian complaints about being misled about NATO expansion were founded in written contemporaneous memcons and telcons at the highest levels.

The two-plus-four-treaty had the function of a peace treaty, but it was not called a peace treaty. This could not be in their interest "for financial reasons", according to the German State Secretary Friedrich Voss at that time. The reason was the open question of German reparations for World War II, especially in the case of Greece. Today Berlin argues that the Greeks should have made their demands in 1990.[20]